#2 - From Lufthansa to Austrian Airlines: Annette Mann's Leadership Journey

Good morning and thanks for having me.

It was actually quite a coincidence. It was never planned. From my family, there was no connection to aviation whatsoever. And, yeah, as you said, I grew up in Simbach, which is directly at the border to Austria. So, Braunau would be the other side of the border. At that time, growing up in the 80s, 90s, there was no internet, right? Munich was the next bigger town, but it was already 120 kilometers away. So, when I did my A-levels, it was all about first finding out what is there out in life. So, I didn't have any plan and I was a bit hesitant should I go into the business direction or I could also imagine to do more of science. So, I did my A-levels also in chemistry. That would have been the other path. But in the end, I decided for business because I thought I have no clue with my 19 years then what could be out there. And I felt that would make me most flexible. And so, during my studies, it was all about trying different types of jobs. So, I tried small companies, large companies, different industries. And so, the first time I was really caught by something. That was when I spent time at BMW. And at that time, BMW had just bought the brand MINI and launched it as a new car. And that was quite exciting. And at that time, it was about that I wanted or I realized that I wanted to be with the cool brand. I also was more tempted to be in a B2C business. But still, I was fascinated by technology and bringing this together. This was what I liked at BMW. So, I thought I wanted to go into automotive. But when I then finally finished my studies, they were in a crisis. And so, it was a total coincidence I looked into other trainee programs because that is, again, what I wanted to, how I wanted to start a career. And then Lufthansa showed up. And it was an amazing program. And so, this was the reason why I joined. And yeah, I never left. Because from then on, it was always quite exciting and interesting. And it didn't take long for me to be really fascinated by aviation. It's a tough business, but it's also quite an exciting business. And here I am.

Why I wanted to do a trainee program was because I was quite aware that joining a large company it is quite tough to get good perspective. And there's so many different kinds of jobs and expertises. And so, it was a fantastic time with project work to just try to understand as much as possible what's the business kind of like. And that time showed me that every time you change the role, you gain a new perspective and it widens your perspective. And there's never this one truth. And so, this guided me a lot over my career, always when I made a decision what could be my next job, that I always wanted to kind of collect different perspectives. And you said before, well, there was now more than 20 years of career in Lufthansa. And I always tried to be once in headquarters, then out in the markets and sales, for example, in strategic positions and operations positions in projects. And so, with all that kinds of different roles, this gives you more and more perspectives and a more holistic view of the business. And probably that's also what brought me then finally in that kind of position, collecting these different perspectives.

It was probably, yeah, it was probably the time when I, again, learned a lot about how the business runs. Because implementing premium economy, the tough thing was not sourcing some new seats and putting them into an airplane. But the thing was, how do you launch a kind of new product line between two others? And when you compare that, and I use that example a lot, the challenge was to convince Lufthansa at that point of time, no matter of management, but also lots of colleagues that there is room for something between economy and business class. Because so many people were afraid, if we launch something, it could dilute business class. And business class at that point of time was always the most profitable product line. And airlines being very reliable and very, very dependent on that. And at the same time, not too many people believed, because economy is kind of a price-driven business, right? That there would be enough people paying more for premium economy. And so, yeah, discussing these beliefs and also changing these beliefs that there is room. I used the example of cars where I said, look, pretending that there's no room for premium economy would be a bit like BMW says there's no space between the three series and the seven series, right? And there is a lot in between. There is, indeed. And so, I actually used that BMW example when implementing premium economy. And in the end, it was successful. And it teaches me a lot because it was about the strategic business case, but then also about how do you implement that in a commercially right way? How do you get the pricing right, the marketing right? How do you find the right target groups for this product in between? How do you attract enough people from economy? And how do you hold enough people back, jumping down from business class? But in the end, it worked out.

Yeah, I get that question quite often. And I would say, I try to adapt it to situations. And I try to adapt it also to people. I don't think there is this one leadership style which makes you successful through your entire career in every situation, because, well, over more than 20 years, in aviation, there's always times where there's growth and where everything is booming, right. And then there we had, on the other hand, we had deep crises. Corona, for sure, was the deepest crisis and the most existential one. And in that times, you need different kind of leadership style than when while implementing something new like premium economy. And the other thing is when you lead people, I'm sure we will also talk about diversity, right? I always try to have a diverse team, not just in terms of men, women, but also in types of character. And if you have someone who's really new in a leadership position, probably that person needs a different kind of leadership style than someone who's super experienced and probably like on the way to the next career level. And so I try to be sensitive on what's needed. And over time, I tried different kinds of leadership styles. It's probably more the question, what do I like most? It's probably a bit surprising. I like more the extreme. So it is kind of interesting to lead in a really deep crisis because then things become very clear and fast. So that's something that does fit me. But the other thing is like developing something new, building something new. That's very much my passion. And so that's probably something where I try to also let others feel my passion and then try to get energy into the system. That's what I really do like. But yeah, you have to just be adaptive, I believe.

Well, actually, I spent very little time in the formal headquarters. So I started with Lufthansa Airlines. So I was deep in the airline business. And then I also, for example, spent two years out in the field and in sales in Hamburg. And then also in 2015, I went to Zürich and already spent five years in Swiss. And so it is not the first time for me to be kind of out in a business unit. And what I always enjoyed is the jumping forth and back because then we're back to perspectives, right? And I think it is super important in upper management roles to understand both, to understand what's needed from a headquarter perspective, but also to understand what's needed to be a successful business unit. So I tried to play that out. When I would have to choose what do I enjoy more, I would really say it's hard. When you're in the one role, I can very much identify now being here and being responsible for a business unit. But I also enjoyed my headquarter roles. I mean, it's a huge wheel you can drive, right? And that also has quite its fascination. And it depends. And I like to be switching.

Yes, we have a lot of brands and it changed a bit from being competitors. That was the case for many years. And it becomes more and more collaborative because the understanding is, we have to stick together and we have to act as a team and as a family in order to be competitive out there in the world. I mean, especially aviation in Europe has become really a tough business. Why? Because, over the last 20 years, there was the rise of the low cost carriers with a totally different business model, super successful. So I admire that a lot. That's very professional. It's very different to a network airline. And so that has given us a hard time. And the other thing is, I mean, the Americans are really strong, but especially the Gulf carriers and Turkish airlines. I mean, these countries, they have really understood that aviation is a strategic industry where they can drive their also location factors, right. And also the Chinese are really aggressively getting into the market. So the competition is out there and not within the group. And that's, I think, really a basic belief which we have to have. And so, yes, we benchmark each other, but very much these days to better understand what can I learn from each other, which is great. Where do I see Austrian there? Austrian is probably the brand which stands most for hospitality and warmth and warmheartedness and also is operationally extremely successful. So we're super stable. We have really high punctuality ratings, all that. And so people really like so when we look at our customers and how they rate us, we have very high scores. The downside of Austrian is a bit that we operate here in the market, which is quite tough. Yes, Vienna is a big city, but there is little industry. There's not many global headquarters where there would be a lot of business travel, right. So it's a lot of tourists and we have by far the highest share of low cost competition at our hub. So we're at about 30 percent. All the other hubs in Lufthansa group, it's more like single digit. And so that gives us a hard time to really reach the level of profitability that is actually needed and expected within the group. So again, quality is really high, but we're always challenged on our profitability.

Yeah, we still have a very, very strong footprint in South, South East Europe, of course. And we also now after Corona, we again want to strengthen that and very much looking into that. Basically, when you look at our network, it's 360 in Europe, right? You can't just focus on one area. And of course, in summer, it's a very touristic portfolio all over the Mediterranean. A very strong traffic streams, for example, to Spain and but also to Greece. And but for example, also now the Nordics are coming. And so we always have to look into opportunities and well, there's some backbones like South, South East Europe and always opportunities you just have to take. When it comes to long haul the focus is clearly on the North Atlantic routes. Why? Because I mean, this is quite good business. And also in the joint ventures with United, that's a strong business for the whole Lufthansa Group. And also quite good business. And it becomes more and more difficult to fly to the East because of the competition with carriers where you ... it becomes more and more tough to compete because they have totally different frameworks. I mean, if you look into Turkey, right, they want to push aviation and they do everything. Very much state driven as well. Policy, to enter the market ... Yes, absolutely. And so in Europe over the last few years, it was a lot about how can we tax aviation more and how can we make the life of aviation harder just from one year to the other just to give you a figure with the new regulation just from 2024 now to 2025. We have 43 million euros, higher cost just out of the staff mandate and the ETS, which got more strict while we had a result of 6 million euros. So I mean, it's nearly two thirds of our profit, right, which is just additional cost now from one year to the other, just out of EU regulation. And that's something and that's just one piece of regulation. And that's just something Turkish or also the Gulf carriers, they don't have rather the opposite. They get a lot of support. And this makes it super difficult to fly to the east. And so to the west, this is a bit less because yes, there are people who are actually from Central Europe first fly to Istanbul to then go via the Atlantic. That is happening quite often. But still, it's not the majority. And so this is why it's easier to go to the west.

First of all, I would say these are two very different topics because people say they want to fly more sustainably 80 plus percent. But when you really look into how they make their decision, that's very different. And it's a very tiny single digit percentage of people who actually make their decision based on sustainability. And that's a challenge. So everyone talks about it, but hardly anyone in the end really wants to travel sustainably. And however, still, we have a responsibility and aviation, of course, has to become greener. And so what we do, and that's on back to 2011, is Lufthansa was actually the first airline which was using sustainable aviation fuel, SAF. So Lufthansa was part of doing all the certification that actually you can blend it in with about 2000 flights between Hamburg and Frankfurt. So we were at the very forefront of pushing all that development for sustainable fuel. And this is still going on with commitments, with partnerships, with having things like green fairs. So if you want to make a sustainable choice, there are opportunities, not just short haul, but also long haul. We have developed solutions for business customers. So when business customers, when they want to reduce their scope 3 emissions for their duty travel, right, they can do deals with us where they use SAF for their duty travel, and they'll also get certificates for their papers to actually prove it. And so we try to develop products for these people who actually make their decision based on sustainability. But the truth also is doing that on a broad base, like doing it for every single traveler, every ticket, that's still not what the market wants.

Yeah. So one of the ... let's be systematic. So you have as an airline, only three measures to reduce your CO2 footprint, right? The one thing is you can buy new airplanes, because every new airplane on average uses about 20% less fuel. And that's a huge measure. But a costly one, I guess. Yeah, it's a costly one, but in Austrian, we ... it depends a bit on how quickly the manufacturers deliver. But the plan is still that by 2030, we have 50% latest generation aircraft. So let's see that that does already a lot. The second thing is you can fly more efficiently, so using less fuel. And it's a bit like with your car, right? You can drive your car in a way that you use a lot of fuel, or you can drive your car that you're really saving on fuel. And it's kind of the same with airplanes. And there's some things the pilots can do themselves. And there's some things you can do only together with air traffic control. It's about how fast do you ascend and descend? At which flight levels do you fly all these things? And how direct do you fly? And with these measures, you could, in Europe, have another 10% efficiency. So if the European countries would work closer together in their air traffic control, this would give about another 10% of fuel efficiency. But it's quite political, and it's tough to actually reach that, to be honest. Third thing is you use sustainable aviation fuel instead of fossil fuel. And with these three things together, you can come down from your CO2. Will it be at zero in 2050? We don't believe so. And that was never the promise. Being neutral, then how can you compensate somewhere else? And there we're looking both into where can you kind of compensate with measures that are already there. But we're also looking into carbon capture, for example. Is that something which you can use? And also there are first partnerships, for example, with carbon capture on Iceland. There's some first plans of carbon capture, and we're exploring that as one of the measures.

Yeah. To your first question, I strongly believe diversity is so much more than male, female. So when I look into diversity in Austrian, we're not just talking male, female, but also your background in terms of nationality, your background in terms of, well, is there a good mix of ages? Is there a good mix of characters? Is there a good mix of educational backgrounds? All these things, because I think this is true diversity and not just the male, female thing. I think it's really too much narrowed down. And all of these kinds of diversity are important. To the females, I strongly believe it's not about female versus male. It's about, and you mentioned that, women becoming mothers. Because I do believe as long as if you're only a female without kids, right, I think your chances have never been better than today. Most of the big companies have raised programs and there's quotas out there and nearly all companies are actively looking for female talents who want to have a career. And so I don't think there's any good excuses not to make a career if you really want it. There's all the opportunities. When you become a mother, I think there it starts to be difficult, but let's be honest, very much because of our countries. I mean, we live the idea of family and how we care for families in a very different style than even France is very different, right?

And also the Scandinavian countries are very different or the US, right? There's just a different attitude and how they approach being a family and who cares in a family about the kids and how do you share responsibilities. And I think you can do a lot as a company. So we, for example, we push shared leadership. So that also ... and it's not just females, but also male colleagues who want to have more time for their families, do that in part time but share, for example, leadership positions. And it's easy.

So that we really have a significant number. It's now a bit more than two years. And so far we are super happy and we would further push that. So that's, for example, something you can do as a company. And not let females down once they get pregnant. But I think it's also really important as a society to move forward and to think differently about having a family. To give you one example, what always is kind of amazing, right? There's this, I'm sure you have heard that before. There's a couple and the first baby comes. And then there's this discussion of the one year. Oh, now when you go back into your job, all of your salary, dear mother, is then spent on childcare. Why is it the salary of the mother? Isn't that a crazy thought? I mean, it's the joined baby of a couple. And why do we think it's the salary of the mother that is spent on the daycare? It comes back to the mindset. It is all about the mindset, right? And couples who I know who manage that in a good way, they change their mindset. And I think that's the one thing. The other thing, of course, politics, there has to be better daycare in our countries. But there has also be to the acceptance that you're not a bad mother if you use daycare.

Yeah.

Yeah, my focus clearly is to use the very, very good DNA of Austrian's, strong core of hospitality and push that to the next level, because also having a very good comparison to Lufthansa and Swiss in detail, but also to some other brands, I truly believe this is something very special, which is not easy to copy this kind of warm-heartedness and being close to customers. Also, it's probably a bit easier if a bit smaller than for example, being Lufthansa. And so this is something I really want to further leverage because yes, today we're good, but are we at a level where we could be and should be? I think there's a lot of potential. And yeah, so that's really the core of what we do. And I believe this is not something where you tell the employees be nicer to the customer, but it is something that has to be very deeply rooted in your culture. Just two days back, we reviewed in our board meeting, our recruiting strategy and recruiting efforts of last year. And so two years back, we started to analyze and we said, well, if we want to be a true hospitality company, right, it has to start also there. How do you approach candidates? What's your experience during a hiring process? What's your experience during onboarding? And also when you, for example, in the onboarding phase, we come out of a culture where onboarding was done really just by expert group or expert group. People didn't meet. And that was very much fostering silos. And I believe this is totally wrong. So we completely redesigned that experience of recruiting, of onboarding, getting people together early. And we can see that in our KPIs. So our ratings of how was your recruiting experience really jumped from on a scale from zero to five, from a three seven to a four point eight. And I think that it starts. How do you get into a company? The type of people you hire, what's the attitude towards hospitality, right? When I hire someone, I ask myself, how would I feel if I was invited by that person for a dinner at home? And would I think this person would be a good host? And this is not just for cabin crews, but I believe in general, everyone in the company which wants to be famous for hospitality should have that kind of mindset. And so, of course, we're working a lot on also hospitality. How can we further push that for cabin crews? And they also enjoy that they want to be good hosts, right? But I think it has to be very broad in the company. And so that's how we try to focus on culture work.

I would say be curious, because I think you can only have a good management career if you remain curious and if you want to understand things and if you want to understand how everything fits together and where in a system you have to make changes to make the whole system better. And so I think it's this curiosity to understand complex systems. And that was always something I really liked. But basically, I think curiosity and always being willing to rethink, right? That's something I believe is really, really helpful. And probably especially for females. A few days back, I was asked what was the best advice you ever got. Probably it was don't let anyone tell you how much on how many different disadvantages you have in life because of you're a woman, just do your thing. And so I tried to live that I was never thinking too much about disadvantages because I'm a woman, right. And so if you don't think a lot about it, you don't feel it a lot.

Well, first of all, it's absolutely helpful if you love your job. And I do love my job. So I'm not a big fan of the concept of work life balance, but it's rather a blending. And I think as long as you're passionate about your job, it doesn't feel every hour like hard work, right. So that is absolutely helpful. But still, recharging is super important. And for me, it's being out in the nature. And this is also why we wanted to live a bit at the outskirts of Vienna in a more green area, with a garden there. And so that's really being in nature. And whenever I have more free time, I'm out on the water and go sailing.